BlackBerry Buys Anti-Eavesdropping Tool Used by Merkel

July 29 (Bloomberg) -- BlackBerry Ltd., pushing further
into security services, agreed to buy Secusmart GmbH, a provider
of anti-eavesdropping technology whose clients include German
officials such as Chancellor Angela Merkel.

Secusmart, a Dusseldorf, Germany-based company that already
had a partnership with BlackBerry, makes voice and data
encryption for mobile phones. Financial terms weren’t disclosed.
The acquisition is BlackBerry’s first since the hiring last
November of Chief Executive Officer John Chen, who vowed to cut
losses by focusing on services to corporations and governments.

Now, having stabilized the Waterloo, Ontario-based company,
Chen said in an interview yesterday that he’s laying the
groundwork for hiring and sales growth. With Secusmart,
BlackBerry aims to capitalize on demand for spy-proofing
technology in the wake of revelations about U.S. government
surveillance tactics, including allegations that Merkel’s mobile
phone was tapped.

The deal is still subject to regulatory approval. Chen said
he’s confident Germany will approve the sale, especially since
the government already uses BlackBerry phones and software.

At a time of backlash against U.S. companies, including the
German government’s decision not to renew a Verizon
Communications Inc. contract, Chen said it doesn’t hurt being a
Canadian company.

“Canadians are very neutral, as you know,” said Chen, who
grew up in Hong Kong and is a naturalized U.S. citizen.
“Canadians always do business with everybody else and it’s
fine.”

More Orders

Germany’s government has already distributed about 3,000
encrypted smartphones made by BlackBerry to federal officials,
and has plans to order more such devices, Tobias Plate, a
spokesman for the Interior Ministry, said yesterday at a news
conference in Berlin.

Last month, Germany’s top prosecutor said it would start a
formal investigation into whether U.S. intelligence agents
tapped Merkel’s phone. The White House has said agents aren’t
spying on Merkel and has pledged not to do so in the future.

Chen’s goal is to return BlackBerry to profitability by the
company’s next fiscal year, which ends in March 2016. The
company is seeking to counter declining demand for its phones by
focusing on supplying software and hardware to customers in
regulated industries such as finance, government, health care
and law, which have higher standards for security and risk
management.

Hiring Again

BlackBerry announced plans to fire 4,500 employees, or a
third of its workforce, less than two months before Chen took
over as it tried to streamline the business for a buyout deal
that eventually fell through. As the turnaround plan unfolds,
Chen said he’s ready to start hiring again, with a focus on
sales, software development and customer care.

“I have a plan to start slowly adding headcount into the
company, and now we’re in that phase,” Chen said.

While BlackBerry shares are up 34 percent this year through
yesterday with Chen at the helm, other technology companies are
eyeing the same corporate niche he’s going after. Today,
BlackBerry fell 4.4 percent to $9.51 at the close in New York,
after Bloomberg News reported that Ford Motor Co. is deploying
iPhones for corporate use to employees worldwide, replacing
BlackBerrys.

This month, Apple Inc. and International Business Machines
Corp. said they would work together to develop mobile
applications for businesses. BlackBerry dropped 12 percent the
day of the announcement.

Acquisitions Possible

“I’m paying a lot of attention” to the partnership, Chen
said. “I’m giving them due respect that they could get
something done, although they’re going to have to come from way
behind,” he said.

Part of his plan to stay ahead might include acquisitions,
he said. Areas BlackBerry is interested in include server
technology and identity management, Chen said.

Still, he said he’s being careful not to risk too much in
potential deals.

“It’s not, ‘Because the future is so bright, I’ve got to
bet the farm,’” he said. “I’m a very safe, conservative guy.”